The yield on Sovereign Bonds is the “risk-free” rate from which relative risk in any economy is priced. There is a crisis across all developed nations in the quantum of debt they now face servicing in a global economy where risks are rising and there is a significant threat of stagflation. It’s time for nations to get aggressive about Liability Management of their outstanding debt.

Howls of pain as US markets sink through 200 day moving averages and into correction phase! It’s increasingly clear Trump Version 2.1 still contains significant bugs and 404 errors. Sadly, we can’t simply reboot the OS and hope it starts ups again. Markets will just have to adjust to the new Trump reality.. and it’s likely to hurt. A lot.

A sure sign of just how nervous markets are is volatility and judder moments – the realisation that things aren’t what you thought they were. Who knew a bond bear market was upon us, and interest rates are unlikely to fall? Who knew the Chinese AI Deepseek can do what OpenAI can do at a fraction of the cost?

As the clock ticks down to the US Coronation, markets are aligning for Donald Trump: a sustainable Treasury market, a strong dollar and Trump’s Treasury pick, Scott Bessent set to demonstrate competency at his senate hearing. What could possibly go wrong?

Blain’s Morning Porridge Jan 15th 2025: What happens next? Brave [...]

UK Chancellor Rachel Reeves is being blamed for the Gilt Bear market. Harsh and unfair – it’s a global thing. Investors fear sticky inflation as much as rising debt quantums, tax cuts and spending plans. A global bond bear market brings consequences – be aware of them.

2024 was an “interesting” year – big questions about inflation, growth and geopolitics were all asked, but answers remain difficult. The politics of populism now dominates the agenda. Issues like climate change and ESG have been pushed aside. The lessons don’t change – trade what the market thinks, but invest in facts and likely outcomes.

Politics was an overarching theme in 2024 – and, regrettably, will remain so in 2025 as global investors figure out likely policy action by central banks and the growth outlook for 2025. “This time it’s different” (TTID) and FOMO remain the most malign forces acting on asset prices, but is a new full blown European Sov Debt Crisis also on the cards?

Bitcoin breaking $100k was a judder moment in a market already awash with signs and portents suggesting irrational exuberance has gone too far, and a correction is coming. Meanwhile… the UK govt declares war on Porridge.

Sequels oft disappoint. Just how will the world change after Jan 20th 2025? Maybe not the way we expect. Meanwhile, the global Alternatives markets are becoming increasingly frothy as the big firms bid up for market expertise and scale. Does that suggest they might be missing something?